The cloud is confusing with how to manage it. Aivars Lode avantce
Goldman Sachs Leads $43 Million Investment in ScienceLogic
ScienceLogic Chief Executive Dave Link
Moving software to the cloud, which many companies are now doing, can make their operations simpler and more efficient, but the cloud brings new headaches, too.
IT monitoring company ScienceLogic Inc. raised another $43 million to help tackle those problems in a round led by Goldman Sachs Group Inc.
The Series D round more than doubles funding for the 12-year-old company, which is now on a path toward an IPO after being bootstrapped by founder and Chief Executive Dave Link for seven years.
“Enterprises now require an extraordinary amount of oversight and visibility into IT systems,” said Mr. Link, who said he started the company because he thought IT people had to use too many tools to do their jobs. “People expect perfection. They expect apps to never go down, and ensuring that those apps are always running is hard to do.”
In 2003, when ScienceLogic started, it was less common for companies to put software into the cloud, and they certainly weren’t putting their most important software there.
So the tools that were developed to monitor cloud software weren’t as necessary and didn’t look much deeper than the application layer, according to New Enterprise Associates General Partner Harry Weller, who is on ScienceLogic’s board.
Gradually, however, companies did start to move some of their more important software to the cloud, and Mr. Weller says that NEA, which first invested in ScienceLogic in 2010, anticipated that change.
“We knew ultimately that you’d have to see deeper into the stack of tech in order to trust the cloud architecture, to drill down all the way through the operating system, into the virtual machine, through the networking into storage and hardware,” Mr. Weller said.
ScienceLogic, he said, had already done that work.
In 2012, Mr. Link stepped back as chief executive in favor of an outsider, John Becker. The reason for the move was partly a personal health issue and partly a need to get a third-party perspective on his business as it was going through “an immense growth phase,” according to Mr. Link.
“Sometimes you get so close to something,” he said.
Mr. Becker, however, moved on the following year to become CEO of cybersecurity company Sourcefire Inc., and ScienceLogic’s board brought Mr. Link back as CEO.
ScienceLogic has gone through a pivot, Mr. Link says, extending its technology so that customers like KelloggCo. can see across their entire IT infrastructure, from older, private data centers to newer data centers that accommodate both public and private clouds, which customers sometimes switch between as their computing needs fluctuate.
Although competitors include older companies like International Business Machines Corp., Hewlett-Packard Co., CA Inc., Microsoft Corp., VMware Inc. and others, ScienceLogic has been winning deals chiefly over open-source software, Mr. Link says. In the past year, customer subscriptions have grown by 125%. Even Amazon.com Inc.uses ScienceLogic, Mr. Weller said.
The new money will be invested in sales, marketing, research and development, and international growth. As part of the funding, David Campbell, a managing director of Goldman Sachs Merchant Banking Division, joins the board.
Mr. Link is now trying to operate ScienceLogic as a public company and is excited about 2015, he said, although “we’re not an overnight success story. We kept being very persistent and consistent in our efforts.”
Current investors New Enterprise Associates and Intel Capital also participated in the round. Total funding in ScienceLogic is now $84 million.